Steve Schwarzman, the head of private equity giant Blackstone, has found himself in hot water after he made some remarks at his firm’s boondoggle at Florida’s Boca Raton Resort & Club. In an early morning session, Schwarzman was noodling over Blackstone’s failed attempt to buy the mortgage company PHH, a deal that collapsed when Blackstone discovered no one was willing to lend it money for the acquisition, Peter Lattman explains on DealJournal. To illustrate just how radioactive the mortgage industry has become to financial players, Schwarzman decided to exercise his well known penchant for world history.
“Trying to buy a mortgage bank in the midst of the subprime crisis was the equivalent of being a noodle salesman in Nagasaki when the atomic bomb went off. Not a lot of noodles left, or even a person, and that’s what happened to us on this deal,” Schwarzman said.
Some are now speculating that this remark could have some serious fallout with Blackstone’s business efforts in Japan. If it does mushroom into a major issue, it could cast a cloud over Blackstone's many important Japanese connections. Apparently, some of those Japanese types don’t find noodle salesmen appropriate material for homey, jokey anecdotes.
Steve Schwarzman’s Take on the Subprime Mess [DealJournal]
Posted by guest, May 08, 2008 5:24PM
Augustus(?) Schwarzman.